North East business leaders highlight positivity in financing for business growth

Business leaders in the North East have shared their experiences of raising finance to support growth at a joint event held by Newcastle law firm Square One Law, accountants Deloitte and investment managers Brewin Dolphin.

Speakers at the event included Geoff Thompson, CEO of Utilitywise plc, John Waterworth, CEO of Parkdean Holiday Parks and Nigel Mills, Chairman of The Lakes Distillery.

Advisers who gave professional views on the markets were corporate specialists, James Bryce, corporate finance partner at Square One Law, and David Frith, corporate finance partner at Deloitte.

Insights were also offered into public flotation by guest speaker Mark Fahy, Head of UK and Primary Markets at the London Stock Exchange. Cross-sector businesses poised to take their enterprises to the next level heard how the IPO investment share pipeline is now the strongest it has been in 12 months.

Mark Fahy commented that the ‘fiscal breaks had come off’ which was making private equity investment and IPO listing more attractive: “AIM shares are now able to be held in ISAs for the first time this year. AIM shares will also as of next year be subject to Stamp Duty Exemption,” he explained.

Strong growth sectors indentified include the technology market and the offshore supply chain. James Bryce expanded: “There is much positivity at a macro level and there is evidence of a re-balancing away from the service sector. I also lead the energy team at Square One Law and the energy sector is driving activity with strong growth in the offshore market and its supply chain in particular.

“The private equity market is buoyant and companies are having no issues raising funds. It is becoming something of a buyer’s market with businesses being able to select the right investor. The protection of intellectual property rights is crucial, as is having a strong management team in place at the time of financing.”

David Frith commented that the private equity market had stabilised: “Between 2006 and 2008, transactions appeared to be on a conveyor belt whereas they are now built on trusted relationships and can take years to come to fruition.”

James also commented that alternative financing options, including crowd-funding, are becoming increasingly popular. Nigel Mills, Chairman of The Lakes Distillery, former CEO of Mills Group and Chairman of The Entrepreneurs Forum, said: “Alternative forms of finance are now here to stay. The Enterprise Investment Scheme (EIS) was introduced in the 1990s and offers substantial tax incentives to small firms and new businesses. More recent innovations include crowd funding from the Internet.”

Very topically, following the announcement of the Royal Mail IPO, Geoff Thompson, CEO of Utilitywise plc, commented: “Employee share schemes are now extremely useful for engaging staff; no matter how small their stake, share holders’ genuinely feel more loyal to the company and take real pride in its future growth.”

The audience of 70 business leaders and investors thoroughly enjoyed the event and found the open dialogue and variety of views to be instructive and thought provoking.